Hopes rise as real-estate market improves

Vietnam's social and economic factors are supporting the growth of
its real estate market, which has bottomed out, an executive at property
consulting firm Savills Vietnam has said.

Managing
director Neal Macgregor told a press briefing on the HCM City property
market over the past 20 years that 17 – 20 percent of remittances
flowing into the country went into direct property investment.

"Vietnam is in the top 10 foreign remittance recipients globally, with
last year's figure at around 12.5 billion USD. This is up from less
than 2 billion USD in 2000.

"The quantitative easing
throughout the region will benefit the respective domestic economies
and also encourage foreign investment into other regional targets," he
said.

Recently outward flow of capital had accelerated, noticeably from Singapore, the Republic of Korea, and Japan.

The amended Law on Housing effective from July 1, 2015, which will
enable overseas Vietnamese and foreigners to own houses in the country,
is expected to attract a new wave of investment.

Singaporeans have shown interest, especially in projects developed by companies from their country.

According to Savills Vietnam, the lowering lending rate is helping revive the market.

"Vietnam's current [lending] interest rate is around 9 percent, however this low cost of debt has only recently emerged.

"In 1995 it was around 20 percent."

The shrinking of household size from an average of 4.7 people in 1995
to 3.6 last year has also increased demand for housing.

"As younger people gain greater independence, there has been a gradual
erosion of the three-generation household, the effect has been to fuel
residential apartment development."

The country's
urbanisation rate, from less than 20 percent in 1995 to 34 percent last
year and its rapidly growing middle class — expected to reach 33 million
by 2020 from 12 million in 2012 — are other positive factors for the
property market.-VNA